Sega scrapping Iron Man 2 developer

Though Iron Man 2 won't even arrive in stores for another month, the fate of its developer has already been sealed. Sega has confirmed to Gamasutra the closure of its Sega Studios San Francisco outfit, previously known as Secret Level.

Secret Level was founded in 1999, when it began work on the critically acclaimed Dreamcast port of Unreal Tournament. The studio was acquired by Sega in 2006 as part of an increased emphasis on Western development.

Since that time, the studio has launched two titles for the publisher. The first was the 2008 movie tie-in Iron Man, which left reviewers cold but sold more than 1 million copies worldwide. Secret Level's encore later that year didn't fare as well, as Golden Axe: Beast Rider was a flop, drawing negative reviews and selling fewer than 42,000 copies in its first three months on US retail shelves. It didn't help matters that the game was launched the same day as heavily hyped hits like Dead Space and Saints Row 2.

It's unclear how many employees were laid off as a result of the studio closure. Sega had already downsized its US operations in early 2009, with reports at the time suggesting as many as 30 employees had been laid off at Secret Level.